The run-up to Chinese New Year, which starts on 10 February and will mark the Year of the Snake is a key shopping period. And this year more than ever, the spending patterns of China's 1.3 billion people are expected to be scrutinised as a measure of how the economy is fairing – not only as it recovers from last year's slowdown, but also as it switches from a reliance on exports to consumption.
The slowdown of the Chinese economy is forcing Western retailers to rethink their once rampant expansion in the country while making big shifts in their strategies.
Retail sales of consumer goods rose 15 percent to CNY800.6 billion (USD127.2 billion) on the mainland during the eight-day "golden week" holiday that ended on Sunday, surpassing industry expectations.
The Ministry of Commerce said the retail sector, restaurants and tourism all saw robust growth during the Mid-Autumn Festival and the National Day holiday between 30 September and 7 October.
China's slowing retail growth environment has signalled the peak of the consumer story, according to Francis Lon, Managing Director of Lynen Holdings.
Lon says the Chinese economy is too dependent on fixed asset investment, and consumers can't carry the burden when this drops off.
Sluggish consumer demand has led to a slide in China's retail sales this year. July retail sales fell to 13.1 percent year on year, down from 13.7 percent in June. This is well off the 17.1 percent in 2011 and 18.4 percent rise in retail sales in 2010.
China's Fujian Provincial Economic and Trade Commission announced that by October 2013, they will encourage the building and renovation of 500 community convenience stores, including 100 in Fuzhou and ten in the Pingtan comprehensive experimental zone.
Once these convenience stores pass the acceptance phase, the provincial financial department will allocate a CNY20,000 (USD3255) subsidy to each convenience store.
China's e-commerce economy will grow nearly six times by 2020 as more retailers and vendors tap online shopping to lure consumers. The e-commerce economy - including online transactions and the e-commerce related service industry and information technology infrastructure - will reach CNY43.8 trillion yuan (USD7.1 trillion).
Although Business Monitor International (BMI) forecasts China’s real GDP to grow 7.5 percent in 2012 and 7.1 percent in 2013, which would be the economy’s worst performance since 1999, population expansion and increasing individual wealth are keys to ensuring substantial growth in China’s retail sales.
Chinese shoppers can look forward to greater buyer protection, including being granted "the right to regret", under an amendment to the 1994 consumer rights law currently under review.
Changes proposed in the draft will close loopholes, raise the cap on penalties for non-compliant firms and expand the reach of the law. The amendment, if approved, would help spur domestic consumption, a key policy objective of the central government over the next five years, industry participants said.
Local retailers are setting the pace in the Chinese grocery retailing market, according to market researcher Kantar Worldpanel.
Chinese retailers as a group continued their advance in modern grocery trade, growing from 71.9 percent to 72.3 percent collectively year on year, the market watcher said on Thursday.
As Beijing tries to engineer a crucial macroeconomic shift – toward more consumption and less investment, the crucial "rebalancing" China's new leadership is committed to, and the rest of the world is counting on – it is young consumers who may hold the key to the transition.
Raised in an era of unprecedented prosperity, many members of what is known as the "post-80s" generation (anyone born after 1980) have a very different answer than their parents when it comes to a central economic question: whether to spend the money they have, or save it?